The Loonie Hour #80

On this week's podcast, we discuss the tiny bounce in Canadian house prices, inflation, and welcome Erin O'Toole, former leader of the Conservative party, for a chat about the state of play in Canada.

In Canada, house prices have stopped falling… for now. The MLS® Home Price Index (HPI) edged up 0.2% month-over-month (MoM) but is down 15.5% year-over-year (YoY).

The number of newly listed homes dropped again, down a further 5.8% (MoM) in March. New supply is currently at a 20-year low and months of inventory fell back below 4, which is considered tight.

The Consumer Price Index (CPI) for Canada increased by 4.3% (YoY) in March. Core inflation (ex food and energy), prices rose by 4.5% (YoY). Keep an eye on Services inflation, as we may have turned a corner.

Interestingly, despite the decline in headline figures, all major components rose (MoM). Note that these series are not seasonally adjusted. 

A look at the last few years provides some more context.

Energy is now a major drag on the Headline number, but it begs the question; how long will that last?

Shelter, the largest component in the CPI basket, is rolling over. Its contribution is significant, but it is shrinking.

The crane map we referenced on the podcast suggests that Toronto has nearly 200 more cranes than 14 other major North American cities. There are some doubts about the veracity of the data but it still paints a fascinating picture. Read more about it here.

We also briefly discussed the huge difference in population growth between Canada and the US. Most of Canada’s population growth is due to immigration, while immigration to the US has ground to a halt.

Canada is wholly dependent on energy for our standard of living, a cursory look at Canada’s Balance of Payments makes this painfully clear. Canada sells energy to pay for everything else. Canadians should come to grips with the fact that their economy, their standard of living is dependent on natural resources.

Finally, thank you to Erin O'Toole for taking the time to join our podcast.

Click below to listen to this week’s episode!